Opinion: Hot Spots for Condo Investment in 2017

Frank O'Brien

January 11, 2017

With the Metro Vancouver market seemingly on a corrective course in 2017, where should would-be condo investors turn for reliable rental incomes and solid returns? Real estate investment expert Frank O’Brien, editor of Western Investor, spoke to REW.ca editor Joannah Connolly on the weekly Real Estate Therapist radio show to identify hot investment neighbourhoods for 2017. Here are his four picks.

Grandview-Woodlands, East Vancouver

“Most of my gloomier predictions related to Vancouver neighbourhoods, but my Metro Vancouver pick to invest in is East Vancouver, and Grandview-Woodlands in particular. I know that might go against the grain because of what’s happening in the market in general, but in East Vancouver you can still buy condos that are much cheaper than the West Side. Also a lot of immigration is settling in East Vancouver, you’ve got the new St Paul’s Hospital and the Emily Carr campus coming in, plus a lot of high-tech companies settling there, and in Mount Pleasant. That whole False Creek Flats area is really hot, and the transit connections are good. In all of Metro Vancouver, East Vancouver is the best bet right now if you’re buying for rental income and long-term appreciation.”

Victoria

“Victoria has excellent potential right now. There’s no foreign buyer tax and we have a very low Canadian dollar – we’re talking about US buyers here. It’s emerging as a high-tech hub, with 26,000 people working in technology in the city. In Vancouver, tech company employees can’t afford housing, and companies don’t want to relocate to places like eastern Fraser Valley as it’s too far from the ocean and the urban niche. Victoria has the ocean, it has a great climate and scenery, it has great recreation – it’s becoming a very cool place to live. And the prices are just one-third what they are in Vancouver. The biggest population increase at the moment is people under the age of 34, so the previous idea of Victoria being a retirement city is changing big-time. There’s plenty of land in and around the city, and the condominium building boom is just getting going. You can buy a very nice condo for under $250K and the rental vacancy rates and rental prices are about the same as Vancouver. Victoria is an excellent bet.”

Nanaimo

“What’s great about Nanaimo is the oceanfront, and the province as part of their investment in technology incentives, 60 per cent of this is going into Nanaimo to make it a tech centre. You can easily buy view condos in Nanaimo for only $200,000. It’s the only place in BC that you can fly to Vancouver and back affordably, it’s almost a commute, and then there’s the ferry to the mainland. There could even be a new high-speed passenger ferry, but even without that, Nanaimo has big-time potential for investment. The entry-level prices are so low, there’s great infrastructure there, it’s getting a cool and edgy new downtown and it’s close to the ski hills of Mount Washington.”

Toronto

“My god, Toronto. Toronto has always competed with Vancouver to be the number one condo market. But sales for new condos in 2016 are up 73 per cent year over year, whereas in Vancouver they are down 26 per cent. But in downtown Toronto, you can still find an investment condo for under $300,000 in a great location. There’s a pool of renters that is four times the size that of Vancouver, the rental vacancies are as low as Vancouver’s, the rents are about the same but the initial prices are so much lower and there’s so much to choose from. Toronto’s economy is going great, it leads the country in immigration, there’s no foreign buyer tax and it’s so happening right now – it’s more like New York than Vancouver. Toronto has a great future right now and if I was an investor right now I’d be in Toronto – as long as they don’t bring in the foreign buyer tax.”

To listen to the full interview, click here – and scroll to 28 minutes for the segment on investment hot spots.

Frank O'Brien is the editor of Western Canada's biggest commercial real estate newspaper, Western Investor, as well as a contributing editor at West Coast Condominium, real estate contributor to Business in Vancouverand a regular media commentator on real estate investment.